India’s coal and mining sector stands as the backbone of the country’s industrial progress, playing a crucial role in energy security and economic development. As the world transitions towards renewable energy, India continues to rely heavily on coal, which accounts for approximately 46.2% of the country’s installed power generation capacity. While the government has made strides towards cleaner energy alternatives, coal remains an indispensable part of India’s energy mix due to its affordability and availability.
Dominance of Coal in India’s energy landscape
Coal has been the primary source of power in India for decades. The country holds around 10% of the world’s coal reserves, making it one of the top producers and consumers globally. Despite global pressures to phase out coal, India’s unique energy needs and economic structure make an immediate transition to renewable energy impractical. The Economic Survey 2024-25 highlights that India possesses only 0.7% of the world’s natural gas reserves, making coal a more accessible energy option compared to other fossil fuels.
Technological advancements in Coal based power generation
Recognising the need for sustainability, India has embraced advanced coal-based technologies to reduce carbon emissions. The introduction of Super-Critical (SC), Ultra-Super-Critical (USC), and Advanced Ultra-Super-Critical (AUSC) technologies has significantly improved the efficiency of coal-fired power plants. By mid-2024, India had installed 65,290 MW in supercritical units and 4,240 MW in ultra-supercritical units. Furthermore, NTPC and BHEL are developing an 800-MW AUSC technology-based power plant, which is expected to cut emissions by 11% compared to existing supercritical plants.
Mining sector’s contribution to industrial growth
The mining sector contributes 8% to India’s total industrial output, with major coal-producing states like Chhattisgarh, Odisha, Jharkhand, Maharashtra, and Assam accounting for nearly 60% of all-state mining Gross State Value Added (GSVA). The sector’s role extends beyond coal, providing essential raw materials for industries such as steel, cement, and power generation.
Government reforms and policies in the Mining sector
To boost domestic coal production and reduce reliance on imports, the Indian government has implemented key reforms, including:
- Commercial Coal Mining: The introduction of commercial mining allowed private entities to participate in coal production, breaking Coal India Limited’s (CIL) monopoly.
- Auction of Coal Blocks: A transparent auction process has been initiated to allocate coal blocks to private players, ensuring efficiency and competition.
- Mine Development and Production Agreement (MDPA): This policy framework mandates timely production from allocated mines to meet demand.
- Environmental Norms and Sustainable Mining: The government has mandated coal-washing requirements, afforestation initiatives, and stricter emission norms for coal-based power plants.
Challenges facing the coal and Mining sector
Despite its critical role, India’s coal and mining sector faces significant challenges, including:
- Environmental Concerns: Coal mining leads to deforestation, water pollution, and greenhouse gas emissions. While cleaner technologies are being adopted, balancing industrial growth with environmental sustainability remains a challenge.
- Land Acquisition and Rehabilitation Issues: Many coal reserves lie in regions inhabited by indigenous communities, leading to land acquisition disputes and resettlement challenges.
- Dependence on Imports: Although India is rich in coal reserves, it still imports high-grade coking coal for steel production. Diversification of coal sources and exploration of alternative materials are necessary to reduce dependency on imports.
- Labour and Safety Concerns: The mining industry remains hazardous, with frequent accidents and unsafe working conditions. Strict implementation of safety regulations and modernisation of mining techniques are required.
Role of Renewable Energy in India’s energy transition
India has set ambitious targets for increasing its renewable energy capacity. The Economic Survey 2024-25 highlights that the installed electricity generation capacity from non-fossil fuel sources has reached 2,13,701 MW, accounting for 46.8% of the total capacity. The government aims to increase this to 50% by 2030. While renewable energy sources such as solar and wind are expanding, their intermittency issues and storage limitations mean that coal will continue to play a role in India’s energy security for the foreseeable future.
Future outlook for India’s Coal sector
The future of India’s coal and mining sector will be shaped by a balanced approach to energy security, environmental responsibility, and economic growth. Some key developments to watch include:
- Increased Investment in Clean Coal Technologies: The adoption of carbon capture and storage (CCS) technologies and coal gasification projects will play a role in reducing emissions.
- Exploration of Alternative Fuels: Initiatives to blend coal with biomass and explore hydrogen-based energy solutions could provide a cleaner transition.
- Improved Efficiency in Mining Operations: Automation and digitalisation of mining processes will enhance productivity and safety in the sector.
- Global Energy Market Dynamics: India’s coal import strategies and international agreements on climate change will influence future policies.
India’s coal and mining sector remains an essential pillar of the country’s economic and industrial landscape. While there is a strong push towards renewable energy, coal will continue to be a crucial energy source for the next few decades. The challenge lies in leveraging advanced technologies and policy reforms to ensure that coal-based energy production becomes cleaner and more sustainable. The government’s proactive approach in balancing coal dependency with renewable energy integration will determine India’s energy security and economic trajectory in the coming years.
